New study shows tobacco a drag on Indiana economy

State ranks seventh in the nation in adult smoking rates.

State ranks seventh in the nation in adult smoking rates.

December 21, 2005

MUNCIE, Ind. (AP) -- Indiana's economy would be better off without tobacco production or use, a Ball State University study found. Although some businesses such as tobacco growers and bars that cater to smokers would suffer, other sectors of the economy would benefit from reduced health costs, increased productivity and shifts in consumer spending, according to the study financed by the Indiana Tobacco Prevention and Cessation Agency. "If you were to wave a magic wand and turn Indiana into a nonsmoking and never-smoker place, everyone would live longer," said Patrick Barkey, director of economic and policy studies at Ball State University. Every day, 1.2 million Indiana residents buy and smoke an average of 1.4 packs of cigarettes, the Star Press reported Sunday. Indiana ranks seventh in the nation in adult smoking rates and eighth in the rate of deaths attributed to smoking. Longer lives would mean increased productivity as people kept working and spending money on goods and services instead of medical care, the study found. "The cumulative effect of that is pretty large," Barkey said. "If people didn't spend money on tobacco, they'd spend it on other things. In fact, that would actually be good for Indiana economy." Tom Capehart, a senior economist with the U.S. Department of Agriculture's Economic Research Service, said tobacco does have some positive effect on the economy. "In a non-major tobacco-producing state like Indiana, one of the main economic impacts is tax revenue," he said. "It's a diversified business, which provides jobs." Barkey said a tobacco-free Indiana might lose some jobs but could see as many as 175,000 new ones created.